Stocks Fall as Russia-Ukraine War Rattles Traders: Markets Wrap
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(Bloomberg) -- Stocks fell and global bonds climbed on worries over the latest escalation in Russia’s war against Ukraine.
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S&P 500 futures dipped 0.4%, paring earlier losses as Walmart Inc. rallied about 4% in premarket trading after boosting its outlook. The yield on 10-year Treasuries fell six basis points to 4.36%. The moves were steeper in Europe, with German bond yields dropping to the lowest since October and the stocks benchmark losing 1%. Poland’s main stock index sank more than 3%.
Markets were rattled by reports that Ukrainian forces reportedly carried out their first strike on a border region in Russia using Western-supplied missiles. Earlier, President Vladimir Putin had approved an updated nuclear doctrine that expanded the conditions for Russia to use atomic weapons, including in response to a massive conventional attack on its soil. Putin had pledged in September to revise the doctrine.
“For the moment the market reaction is contained,” said Andrea Tueni, head of sales trading at Saxo Banque France. “Some are still in a wait-and see-mode.”
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Traditional haven assets including the Japanese yen, Swiss franc and gold gained. Ukraine’s sovereign dollar bonds fell the most among emerging-market peers.
In commodities, natural-gas futures advanced as much as 1.1%, trading near their highest levels in a year. Gold was up 0.7% at $2,630 an ounce. Oil traders, meanwhile, appeared unfazed, with prices falling after Europe’s largest oil field gradually restarted following a power outage.
The sudden repricing underscored how vulnerable markets remain to any flare-up in the conflict. It cut short a long losing streak for Treasuries, which had broadly sold off since mid-September on expectations Donald Trump’s policies will boost growth and rekindle inflation.
Trump Picks
Trump’s pending nomination of a Treasury secretary and the impact that will have on policy was also front and center on Tuesday. The transition team is considering pairing Kevin Warsh, a former Federal Reserve official, in the Treasury secretary role, with hedge fund manager Scott Bessent as director of the White House’s National Economic Council, according to people familiar with the matter.